Bankof America – Kuaishou Nearly Triples In Biggest Technology IPO Since Uber

Photographer: Yan Cong/Bloomberg

Kuaishou Technology, the operator of China’s most popular short-video service after ByteDance Ltd.’s Douyin, jumped 194% in its Hong Kong debut after a $5.4 billion initial public offering that attracted hundreds of billions of dollars of orders.

The shares opened at HK$338, compared with the IPO price of HK$115, valuing the Tencent Holdings Ltd.-backed firm at $179 billion. The company sold shares at the top of its price range in a deal that ranks as the world’s biggest internet IPO since Uber Technologies Inc.’s $8.1 billion U.S. share sale in May 2019.

That spectacular rise confers on Kuaishou a price tag rivaling TikTok’s parent ByteDance — which last sought funds at a $180 billion valuation — and ushers the nine-year-old video app into the ranks of China’s largest tech corporations. Once known for peddling quirky depictions of rural Chinese life, Kuaishou cements its place among a generation of mega-startups like food delivery giant Meituan and ride-hailing leader Didi that grew up in the years after Alibaba Group Holding and Tencent Holdings.

If the gains hold, that would give Kuaishou the second-best debut ever for an IPO over $1 billion in the world, data compiled by Bloomberg show. It joins an already long list of floats that have popped on their first day of trading in recent months amid a glut of liquidity and ultra-low interest rates.

Morgan Stanley, Bank of America Corp. and China Renaissance were joint sponsors of the deal. Kuaishou shares were up 162% at HK$301 as of 3:57 p.m. in Hong Kong. The stock could be added to the Hang Seng China Enterprises Index later this month if its market value would be among the gauge’s 10 highest as of Friday’s close.

The stellar debut will be an encouraging sign for larger rival ByteDance, which is said to be in discussions to list some of its assets in Hong Kong. Long a rumored IPO candidate, the TikTok owner was bogged down last year in fighting a U.S. ban on its globally popular app after being labeled a national security threat.

“A successful listing by Kuaishou will pave the way for its larger rival,” said Bloomberg Intelligence senior analyst Vey-Sern Ling. “Douyin will be more motivated to come to the market and investors can get better insight into China’s short-video industry with Kuaishou’s regular disclosures going forward.”

Breaking Records

Kuaishou’s coming-out party broke records in Hong Kong for the number of retail investors subscribing to its shares and the amount pledged in the process. About 1.4 million mom-and-pop investors — one of every five people in the city — submitted HK$1.26 trillion ($163 billion) of orders, while institutional buyers stumped up almost $200 billion.

The demand matched the frenzy for the Hong Kong leg of Ant Group Co.’s mega IPO, which drew in HK$1.3 trillion of bids for its retail tranche, before the planned $17.2 billion offering collapsed.